Office giant Dexus among groups dumping earnings forecasts
Office property specialist Dexus has joined mall landlords and developers in dumping guidance for this financial year, but says it may not be as hard hit as other companies claiming its balance sheet is sound.
Dexus manages a $33.8 billion portfolio and directly owns $16.8bn of office towers and warehouses, and runs another $17bn worth of properties, including some malls, for major pension funds.
It says its operations have performed in line with expectations but considering the evolving COVID-19 situation and uncertainty that lies ahead, the company has withdrawn both its fiscal 2020 guidance and associated assumptions.
Dexus chief executive Darren Steinberg says the industry faces unprecedented and challenging times and signalled it will support tenants, particularly small businesses and retailers, of its office towers and shopping precincts.
The company says it is well positioned with a gearing of 25.5% and debt split between banks, which account for 35%, and debt markets about 65%.
Dexus raised capital last year, has $1.3 billion of cash and committed undrawn bank facilities available and has limited debt refinancing requirements, with about $400 million of debt maturing late in the 2021 fiscal year.
Dexus is slated to receive settlement proceeds from the sale of a second tranche rights on April 1, with Singapore’s GIC to acquire a further 24% interest in an unlisted logistics trust portfolio.
Macquarie analyst Darren Leung says Dexus offers a defensive earnings exposure and initially estimated an impact of only 0.3% to 2020 fiscal-year earnings from COVID-19, although smaller tenants may ask for rent relief. Retail also accounts for about 5% of the company’s office buildings.
This article originally appeared on www.theaustralian.com.au/property.
